The Ideal of Self Governance: funded by the John Templeton Foundation (Grant No. 60688)

This project examines how various institutional arrangements coordinate different forms of social action, ranging from the determination and enforcement of property rights to the provision of regulatory functions and the provision of public goods. The project understands these mechanisms to be ‘self-governing’ when they work outside the formal structures of the state and/or where those affected by a particular social problem have the capacity to ‘exit’ governance arrangements they deem unsatisfactory.

The first part of the grant supports case studies and quantitative analyses of how effectively self-governance solves social coordination problems. Examples of such research includes the operation of ‘noxious markets’; mutual aid and reciprocity-based networks; financial regulation; the supply of collective goods such as urban and environmental planning functions; definition and enforcement of property rights ‘outside of the law’; and trans-national governance and standards-setting processes.

An additional component of this research agenda examines the relationship between self-governing structures and those of formal governments and centralised political authority. The research will seek to identify cases where formal institutions may impede the evolution of self-governing mechanisms; cases where self-governance institutions are dependent on formal government institutions, working ‘in the shadow of the state’: and cases where there is a synergistic relationship of ‘co-production’ between the two forms of rule formation and enforcement.

The second part of the grant focuses on normative questions and developing an evaluative framework based on the principles of ‘robust political economy’ (Pennington, 2011) that can be used to evaluate the successes and failures of self-governance mechanisms. From this perspective different social institutions should be judged based upon how effectively they address governance problems in non-ideal conditions, where the rationality and informational requirements that characterise ‘ideal theories’ of human interaction are absent. In the robust political economy framework the primary constraints are derived from limited or bounded rationality and opportunistic or non-compliant behaviour.

The project will seek to identify those circumstances where governance institutions arising from a ‘bottom-up’ or ‘polycentric’ process of evolution are better placed to cope with these constraints than a reliance on formal ‘governments’ and centralised political authority; cases where formal government may be a more effective mechanism; and finally those instances where the optimal institutional form incorporates a mixture of both self-governance and formal government. The project will examine both social welfare or efficiency arguments for self-governance, as well as arguments addressing when self–governance mechanisms are liberty-enhancing and socially equitable.

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